The Financial Column

Welcome to the Financial Column on Boyletoday.com in association with Money Plus, Bridge Street, Boyle

Q.I have recently received an inheritance of €45,000 from a relative after Capital Acquisitions Tax. I have credit card and a loan from the credit union totalling approx. €4,500 and a standard variable rate mortgage with c. €20,000 with AIB. Should I pay these off and use the monthly repayments I am currently making to start a savings plan ?

A. Using this inheritance to pay off your borrowings would save you the interest you are currently paying on these borrowings. This is a lot more than you could be certain of earning from investing this portion of your inheritance, so this looks like the best option.

As you suggest you could invest the monthly repayments which you will save by clearing your borrowing in a regular savings plan. In terms of how and where you should invest these monthly contributions, this should be determined by your risk profile, i.e. the amount of risk you are comfortable with, the length of time you are likely to invest for, and your overall investment objectives.

However, before providing you with suitable advice about this and about recommending a suitable course of action for the balance of your inheritance, we would need to sit down and establish your overall personal circumstances and financial objectives. For example, should you invest some of the proceeds in a pension ? Have you an emergency fund of c. 6 month’s income which you can access. What are your family circumstances and what financial protection have you in place if you got ill, died or were unable to work ?

Taking the time to consult a professional independent financial adviser will help you to consider the suitable options for your particular circumstances.

For advice on suitable options and alternatives and other aspects of financial planning please consult Belinda McCauley at Money Plus, your local independent financial broker. Belinda and her colleagues at Money Plus, Bridge St, Boyle would be delighted to assist. Belinda can be contacted at 071-9194000/ 086-7847827 or by email: belinda@moneyplus.ie.